Expect more Experience more - Balwin Properties
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Expect more Experience more
Group profile
Business model
Strategic objectives
Strategic update
AGENDA Material risks
Mooikloof Mega City
Investment case
Annexures
The Reid, Linbro Park Sandton
GROUP PROFILE Founded in 1996 by Steve Brookes and currently largest shareholder Listed in the Real Estate Investment and Services sector on the JSE since October 2015 Build-to-sell development model Residential estates are located in high density, high-growth areas in Johannesburg, Tshwane, the Western Cape and KwaZulu-Natal Quality, affordable apartments with unique lifestyle, leisure and entertainment offerings Global green building standards – minimizing environmental impact Winner of 16 international awards recognizing the innovation and excellence of the developments
The Blyde Tshwane East
BUSINESS MODEL FINANCIAL AND OPERATIONAL SUCCESS DEPENDS ON CONTINUOUS DEVELOPMENT Development of large-scale residential estates in key target nodes Selling approximately 25 apartments per location per month Targeting an average profit margin of approximately 35% over the lifecycle of each project Drive efficiencies through turnkey approach to development Maintaining costs and efficiencies through economies of scale Secured approximate 8 year development pipeline of 29 487 apartments Focus on environmental management Izinga Eco Estate KwaZulu-Natal The Huntsman Somerset West, Cape Town
BUSINESS MODEL TURNKEY APPROACH
De Zicht - Milnerton, Western Cape
STRATEGIC OBJECTIVES Cash management and capital allocation Execute on the secured development pipeline Growth in the Green collection model Black Economic Empowerment Ongoing enhancement of the product and customer experience Expanding into future growth nodes Talent management and retention
STRATEGIC
UPDATE
Impact of Covid-19
Well-being of staff and management
of the pandemic
Construction severely impacted –
approx. 3-month delay in construction
Careful management of supply chain
Sustained sales – through online sales
platformSTRATEGIC UPDATE
Future Presidential housing and infrastructure initiative
Greencreek (Tshwane East) gazetted as a SIP
Based on Balwin’s Green collection model - selling price from R499K– R799K
(target FLISP and GAP market)
Accelerated execution on existing pipeline
Government to fund infrastructure
Careful cash management and capital allocation
Focus on environmental management (world’s largest EDGE certification)
First Eco/Green Bond in SA with reduced interest rates
All new developments built according to global environmental standards
aimed at obtaining Excellence in Design for Greater Efficiency (EDGE)
certification for all apartments (16 000 apartments registered)
6-star Green rating from the Green Building Council SA for all Lifestyle
CentresKikuyu, Waterfall, Johannesburg
MATERIAL RISKS Challenging macro-economic environment Cash management and capital allocation Delays in town planning and local authorities Ability to source and fund future land acquisitions Regulatory compliance and changes in government policies Scarce and skilled people to complement the organisational structure and culture Reliance on key suppliers and contractors Injuries and fatalities on construction sites Information security and business continuity
Greenkloof, Pretoria East, Artist impression
MOOIKLOOF MEGA
CITY
INTRODUCTION
Initial 16 000 apartments
Gazetted as a Strategic Integrated Project
(SIP): Human Settlements
External bulk infrastructure funded by
government
Majority control (70%) in separate statutory
entity
Balwin to act as the developer - earn
development management fee from JV
Significant future pipeline – up to 50 000
opportunitiesMOOIKLOOF MEGA CITY DEVELOPMENT PLAN Mooikloof Mega City is situated in the eastern part of The City of Tshwane’s municipal area and covers an area of approximately 200ha across two townships The development will be undertaken by Balwin as part of its Green Brand Initiative First phase of 16,000 forecasted to be constructed and sold over approximately six years The development will consist of a mixture of Studios, 1-, 2- and 3-bedroom apartments, in 18, 20- or 38-unit blocks (ie. Balwin’s normal Green Brand) The apartments will sell for between R499K and R799K each, focusing on the GAP housing market
MOOIKLOOF
MEGA CITY
DEVELOPMENT PLAN
The total project value is
approximately R35 billion
The location and price-point of the
development, lends itself to the
influx of first-time homebuyers,
qualifying for FLISP and other
government subsidies, providing a
broader spectrum of the population
to become property owners
This significant project will
accommodate a large portion of
the previously disadvantaged South
African consumer into the
mainstream economy. This project
will clearly demonstrate that GAP
housing and upmarket
developments can exist side by
side.MOOIKLOOF MEGA CITY
MOOIKLOOF
MEGA CITY
Mooikloof Mega City External Artist impressionMOOIKLOOF
MEGA CITY
Mooikloof Mega City Internal Artist impressionMOOIKLOOF MEGA CITY SOCIOECONOMIC SUMMARY
MOOIKLOOF MEGA CITY SOCIOECONOMIC SUMMARY
MOOIKLOOF MEGA CITY SOCIOECONOMIC SUMMARY
Kikuyu, Waterfall Johannesburg
INVESTMENT CASE Well positioned to address the undersupply of housing in the target market Long-term development pipeline in key locations Green Model enabling acceleration of existing land bank/pipeline Potential significant growth opportunity through Strategic Integrated Projects (SIP) Strong, nationally recognized brand Experienced management team with extensive market knowledge Flexibility to adapt to changing market conditions Proven business model for large scale developments Sustainable margins supported by high level of pre-sales High barriers to entry Proven track record of 25 years
THANK YOU
QUESTIONS? QUESTIONS?
ANNEXURES
Development Pipeline
Business model
Green Collection
Classic Collection
Signature Collection
ANNEXURES Summarised statement of
Profit and loss
Statement of financial
position
Balwin FoundationPIPELINE AS OF 29 FEB 2020
Total
Expected Expected Total
Total Total Total apartments
commencement date of apartments Total unsold Balwin
Development Status (*) apartments in apartments apartments sold but not
date of Completion of recognised apartments pipeline
development sold registered recognised
construction construction in revenue
in revenue
Waterfall
Kikuyu Commenced Nov 2021 A 1 270 913 859 357 389
881 32
The Polofields Commenced Jun 2023 A 1 512 686 651 826 857
655 31
Munyaka Commenced May 2028 A 4 972 - - 4 972 4 972
- -
1
Total 7 754 1 599 1 510 6 155 6 218
536 63
Johannesburg East
The Reid Commenced May 2022 A 1 294 468 438 826 841
453 15
Westlake 2 TBC TBC I 312 - - 312 312
- -
Total 1 606 468 438 1 138 1 153
453 15
Johannesburg North
Amsterdam Commenced Complete C 1 040 950 905 90 107
933 17
The Whisken Commenced Jun 2022 A 1 490 422 422 1 068 1 068
422 -
1
Total 2 530 1 372 1 327 1 158 1 175
355 17
Johannesburg South
Majella Park TBC TBC I 280 - - 280 280
- -
Total 280 - - 280 280
- -
KwaZulu Natal
Ballito Hills Commenced Feb 2024 A 1 320 460 241 860 1 061
259 201
Ballito Creek TBC TBC I 1 872 - - 1 872 1 872
- -
Izinga TBC TBC I 2 505 - - 2 505 2 505
- -
Marshall Dam TBC TBC I 1 092 - - 1 092 1 092
- -
Total 6 789 460 241 6 329 6 530
259 201PIPELINE AS OF 29 FEB 2020
Total
Expected Expected Total
Total Total apartments
commencement date of Total apartments apartments Total unsold Balwin
Development Status (*) apartments apartments sold but not
date of Completion of in development recognised in apartments pipeline
sold registered recognised in
construction construction revenue
revenue
Tshwane
The Blyde Commenced Feb 2028 A 3 580 799 612 759 40 2 781 2 821
Total 3 580 799 612 759 40 2 781 2 821
Western Gape
De Zicht Commenced Nov 2020 A 876 701 649 668 33 175 208
Paardevlei Lifestyle Estate Commenced Aug 2021 A 388 208 175 176 32 180 212
Paardevlei Square Commenced Complete C 87 87 87 87 - - -
The Jade Commenced Complete C 432 432 430 431 1 - 1
The Sandown Commenced Complete C 636 636 636 636 - - -
The Huntsman Commenced Nov 2023 A 1 044 128 55 110 18 916 934
Fynbos Commenced Feb 2024 A 1 116 136 - 52 84 980 1 064
Zevenwacht TBC TBC I 854 - - - - 854 854
Total 5 433 2 328 2 032 2 160 168 3 105 3 273
Green Projects
Greenlee Commenced Oct 2024 A 1 816 190 - 75 115 1 626 1 741
Greenpark Commenced May 2022 A 1 288 377 269 352 25 911 936
Greencreek Commenced March 2026 A 1 872 - - - - 1 872 1 872
Greenwood TBC TBC I 1 760 - - - - 1 760 1 760
Greenbay Aug 2020 Nov 2028 I 1 728 - - - - 1 728 1 728
Total 8 464 567 269 427 140 7 897 8 037
Grand Total 36 436 7 593 6 429 6 949 644 28 843 29 487BUSINESS MODEL Model targets a lower LSM market than the core model Offers flexibility to determine preferential sales strategy (sell to market or sell to individual investor) to maximise returns Developed on a phase-by- phase approach Distinctive architecture that is different to the core business model but synonymous with Balwin quality Residents have access to lifestyle features associated with Balwin brand
BUSINESS MODEL Quality, affordable build-to-sell product One-, two-, and three-bedroom four-story walk- up apartments Prices range from R599 900 to R1 999 900 focusing on the middle-income population Developments located in high density, high growth nodes across key metropolitan areas Benefits from economies of scale, in-house construction and management Developed on phase-by-phase basis Dynamic product allows for block configuration change to respond to market Exclusive lifestyle offering to clients as an all- inclusive value-added service
BUSINESS MODEL Two elite model developments, The Polo Fields (Waterfall) and Paardevlei Lifestyle Estate (Somerset West) Apartments built to higher specifications Prices range from R1 999 900 to R2 999 900 Developments built on existing land in selected nodes and follow the same phase- by-phase approach Balwin does not intend to continue the elite model developments in the current market
BUSINESS MODEL
ANNUITY INCOME
Leverage off asset base and expanding
service offering to clients
Partnerships established to provide high-
speed fibre connectivity and solar
installation which generates renewable
energy
Complementary to Balwin’s business model
and enhance the lifestyle offering to clients
Limited additional construction costs
necessitated to generate annuity returnsSUMMARISED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME GROUP
For the year ended For the year ended
29 February 2020 28 February 2019
R'000 R'000
Revenue 2 914 453 2 613 905
Cost of sales (2 124 703) (1 826 024)
Gross profit 789 750 787 881
Other income 19 847 16 002
Operating expenses (235 613) (173 808)
Operating profit 573 984 630 075
Investment revenue 13 673 4 590
Net finance income (12 643) (6 176)
Share of profit of associate 322 -
Profit before tax 575 336 628 489
Taxation (163 976) (176 106)
Profit for the year 411 360 452 383
Other comprehensive income 36 103
Total comprehensive income 411 396 452 486
Profit attributable to:
Owners of the parent 411 610 -
Non-controlling interest (250) -
411 360 -
Total comprehensive income attributable to:
Owners of the parent 411 646 -
Non-controlling interest (250) -
411 396 -
Basic and diluted earnings per share
Basic (cents) 88.02 95.82
Diluted (cents) 87.17 95.80
Key ratios:
Gross profit margin 27.10% 30.14%
Total comprehensive income/revenue 14.12% 17.31%
Effective tax rate 28.50% 28.02%SUMMARISED STATEMENT OF FINANCIAL
POSITION
GROUP
For the year ended For the year ended
29 February 2020 28 February 2019
R'000 R'000
Non-current assets 100 026 101 185
Current assets 4 507 714 4 298 926
Developments under construction 3 369 972 3 042 919
Cash and cash equivalents 476 532 329 382
Other current assets 661 210 926 625
Total assets 4 607 740 4 400 111
Shareholders’ equity 2 951 640 2 653 856
Non-controlling interest (250) -
Non-current liabilities 252 639 375 473
Other non-current liabilities # 102 805 -
Current liabilities 1 300 906 1 370 782
Development finance 1 167 057 1 148 208
Other current liabilities 133 849 222 574
Total equity and liabilities 4 607 740 4 400 111
# Other non-current liabilities relates to deferred tax and the long term portion of the lease liabilityBALWIN FOUNDATION
Core Focus
01
EDUCATION:
Scholarships, Bursaries and Learnerships 01
to support and empower the youth in EDUCATION
areas related to the building industry.
02
DEVELOPMENT:
Building related trade training skills Registered
development and short courses to increase in 2016.
Started
employability for the unemployed from local operating
communities, as well as development of in
May 2017.
02 03
SMMEs in order to promote job creation.
03 FUNDING:
Obtain various sources of sustainable DEVELOPMEN FUNDING
funding in order to fund various causes and T
develop local communities, schools,
sportsgrounds etc.BALWIN FOUNDATION
BALWIN FOUNDATION
BALWIN FOUNDATION
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